Olaplex is hit with a new lawsuit as the hair care brand faces mounting scrutiny

An Olaplex shampoo bottle.

Hair care brand Olaplex is facing a lawsuit over its stock price drop since its 2021 IPO.
It’s also facing a lawsuit in Canada about lilial, an ingredient banned in the EU earlier this year.
Olaplex gained popularity on TikTok and other social media as a hair care routine product.

Last fall, hair care brand Olaplex was riding high. It had just gone public, and its products were favorites of many beauty influencers.

One year later, the brand is facing scrutiny from some consumers, lawyers, and equity analysts. The tumbling stock of Olaplex, a fixture on hair-care routine TikTok, also seems to have caught the attention of the plaintiffs’ bar. 

This month, the firm Pomerantz LLP, which specializes in representing shareholders in securities lawsuits, brought a stock-drop suit against Olaplex, alleging that the company hadn’t properly warned investors about challenges in the industry. 

The suit, filed in California federal court, targets Olaplex’s fall from $21 a share when it went public in September 2021 to $4.24 a share last month. It is seeking to represent a potential class of as many as “thousands” of investors who bought Olaplex stock after it went public, according to the complaint.  

The suit accused the company of “negligently” compiling IPO-related documents that it said painted a more optimistic picture of the company’s revenue trajectory than warranted.

“Specifically, the offering documents made false/and or misleading statements and/or failed to disclose that macroeconomic pressures and competition in the hair care market were more robust than the company had presented to investors,” the complaint said. 

Such lawsuits are not uncommon, and often follow a similar pattern of citing a company’s public SEC filings to bring allegations about purported misrepresentations of business prospects, attorneys told Insider. 

These suits generally tend to be more notable if they contain other sources of independent allegations, like “some …read more

Source:: Businessinsider

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